>vastly increases the returns for individuals. Yes, they get pushed to big companies and "safer" investments. But they also get scammed less often. Overall it's

>vastly increases the returns for individuals. Yes, they get pushed to big companies and "safer" investments. But they also get scammed less often. Overall it's a big win for individuals. Returns are a function of efficiency. By excluding 99% of the economy from direct access to capital markets, enormous friction is created, and investors are forced to pay far more economic rent to big companies. Both of these have undoubtedly resulted in investors enjoying lower returns. Scams are indeed a problem, but the solution to scams is to deter them, by punishing those found guilty of carrying them out. What society shouldn't do is make it illegal to engage in some class of mutually voluntary economic interactions without approval from a third party, in the name of preempting scams, and keeping people safe from their own mistakes. Such laws violate some basic principles of liberal democracy and create economic inefficiencies, and unfortunately, they have become steadily more common over the last 100 years. Trying to make massively complex industries like finance, healthcare and food processing safe, through a set of bureaucratic rules, is a case of trying to centrally plan the economy using cookie cutter solutions that cannot possibly account for all possible configurations. It will necessarily stifle innovation and create opportunities for rent-seeking, like in the creation of the $6 million barrier to direct access to the public capital markets that are IPO restrictions, that enrich large financial intermediaries. If these proscriptive laws were repealed tomorrow, there would definitely be an uptick in scams. But the market is an evolutionary institution that has the right incentives and feedback loops to evolve toward better configurations that avoid inefficiencies like fraud. And we have evidence for this in the cryptocurrency world, where reputation and consumer knowledge rapidly transformed the industry to make it harder for scammers. For about three years there were rampant hacks of major Bitcoin exchanges, and fraud where people lost thousands of bitcoin to web wallets that gained their confidence and then pulled exit scams. Eventually bitcoin users wised up, and the industry responded by producing high quality services. In the exchange market, this meant credible exchanges with reputable parties backing them, and that used security best practices, became available, and became the first choice of users, while in wallets, both bitcoin users and bitcoin information portals became more discriminating in the wallets they put their confidence in, and became much more cautious about web wallets that acted as custodians for customer funds.